(843) 286-1000A reverse mortgage is a loan for senior homeowners that allow a portion of the home’s equity to be used as collateral. To be eligible for a reverse mortgage, all homeowners must be at least 62 years young. Unlike a traditional mortgage (credit score, income and debt ratios requirements along with a monthly payment), the reverse mortgage does not require income, minimum credit or a monthly payment. The amount that can be borrowed with a reverse mortgage is based on a FHA formula that considers age, current interest rate, appraised value and current lending limits.
Common Myths:
1. Myth – A reverse mortgage sells my home to the bank…..
Fact – The homeowner keeps the title to their home in their name. What the bank does is add a lien onto the title so that the bank can guarantee that it will eventually receive payment for the funds that were borrowed.
2. Myth – The homeowner can be forced out of the home…..
Fact – The reverse mortgage was designed to allow seniors to live in their home for the rest of their lives. Since there is not a monthly payment required, the homeowner can never be evicted or foreclosed on for non-payment. However, the homeowner is responsible to maintain the home in good condition and keep the property taxes and insurance paid.
3. Myth – Someone can outlive a reverse mortgage…..
Fact – The reverse mortgage becomes due and payable when all homeowners have moved out of the property for 12 consecutive months or passed away.
4. Myth – My Heirs will not inherit the property…..
Fact – The estate inherits the property as usual, but there will be a lien on the title. The lien will be for the reverse mortgage proceeds plus accrued interest. A reverse mortgage is a “non-recourse” loan which means that the borrower (or his estate) can never owe more than the value of the property.
Purchase a Home with a Reverse Mortgage
The advantage of using a reverse mortgage to purchase a home – it can increase the amount you can purchase with NO MONTHLY PAYMENT. For example, a consumer has $150,000 in cash to purchase a home. Using a reverse mortgage, based on their age, current interest rates and lending limits, they may consider looking in the $250,000 – $300,000 price range for their new home. This offers the consumer the option of keeping a portion of their savings or increasing their price range.
Reverse Mortgage Advantages
v Allows the homeowner to stay in their home for the rest of their lives.
v Simple to qualify – no income or minimum credit score requirements.
v A reverse mortgage is a “non-recourse” loan – never be “upside down”.
v Loan proceeds are not taxable.
v Best of all……NO MONTHLY PAYMENT.
Provided by:
David Neff
Vice President / Mortgage Loan Officer
BNC Bank Mortgage Division
3751 Robert Grissom Pkwy, Myrtle Beach, SC 29577
Office: 843-839-4937 / Cell: 843-424-1072
Email: dneff@bankofnc.com
NMLS # 659249